The first two planes were converted in Spain, by Airbus Military - the aircraft's designers. Planes three and four will be converted in Britain but the remainder will be upgraded in Spain.

"The change means that up to 320 UK jobs will unfortunately go - this affects 237 Cobham jobs and those of 83 contractors - and the change will happen by the end of the first quarter of next year," a source close to Cobham told Reuters on Friday.

The tanker planes, which are 60 metres long, can carry 100,000 litres of fuel and pass it on to other planes at a rate of 5,000 litres a minute.

The AirTanker consortium is made up of Britain's Cobham, the pioneer of in-flight refuelling, Rolls-Royce, Babcock International and France's Thales.

"Cobham and Airbus Military have mutually recognised that it is the best way of meeting their own commitments and have taken the responsible decision to transfer the work," said AirTanker chief executive Phill Blundell, adding that the change would help the consortium deliver the planes to the UK "on time and to cost".